Once they got pass the hurdle, Kildall was cold to IBM’s insistence that Digital Research negotiate a flat licensing fee for CP/M and forgo Digital Research’s usual per unit royalty rate. It didn’t help matters that Kildall was generally disapproving of IBM because so many IBM products struck him as slow, unimaginative and clumsily designed.

But the biggest stumbling block preventing a deal was Kildall’s timing, or rather, his utter disregard for timing. IBM planned to build its personal computer around a new, faster Intel Chip called the 8086, but CP/M would need an upgrade in order to run on it.

Kildall already had such an upgrade in the works, called CP/M-86. But Kildall either wouldn’t guarantee to Sams that it would be delivered enough to meet IBM’s development deadlines.

Sams tried to explain that IBM needed a schedule and a commitment by October 1980, but Kildall resisted. Perhaps Kildall assumed that IBM would bend to his schedule, since it appeared that IBM needed him and CP/M’s 90% market share more than he needed IBM.

But what Sams gathered from Kildall’s attitude was that Kildall would never be a reliable partner and that the IBM PC project needed an alternative plan for an operating system.

Not long after, he stopped returning Kildall’s calls. Kildall’s fate was sealed forever as “the man who could have been Bill Gates.”

By giving up on Kildall and CP/M, Sams put himself in a tight spot. But Sams also knew that Gates, more than anyone, would be highly motivated to help him find a way out. During the time that Kildall was giving Sams a runaround over royalties and deadlines, Gates was back in Seattle bending over backward to accommodate IBM’s development schedule.

He had put almost Microsoft’s personnel to work on the IBM effort, shoving other projects to the side. Now Gates needed IBM PC project to succeed, if only out of a sense of survival of Microsoft.

Even though the Softcard was a slight diversion from Microsoft’s normal focus on computer language software, Gates embraced it because it represented yet another strategic opportunity to extend CP/M’s market domination while also binding Microsoft BASIC to CP/M. Microsoft eventually sold hundreds of thousands of Softcards, which told Sams that it was a popular and reliable product.

Sams started his software hunt by contacting Gates and proposing IBM license the Softcard, along with all other programming languages Microsoft offered.

What Sams didn’t understand was that although Softcard was a Microsoft product, its most valuable feature was the CP/M operating system, owned by Digital Research. Gates told Sams that IBM needed to license CP/M directly from Kildall and offered to help Sams make the deal happen.

At the time, Gates accepted his subordinate position in the software food chain. He had positioned Microsoft so that the company’s success was dependent on CP/M’s continued market domination. If CP/M were paired with Microsoft BASIC inside the new IBM PC, Gates saw how the two complementary programs might be inseparable as industry leaders for years to come.

Gates arranged the initial meeting with IBM and Kildall. With Sams in the room, Gates called Kildall and said he was sending an important client and that Kildall should, according to sources, “treat them right.”

Gates’ phone call, however didn’t do much good. Almost nothing went right when Sams and his team sat down with Kildall and his wife Dorothy, who managed the business side of Digital Research. At first, Dorothy absolutely refused to sign IBM’s strict, strongly worded confidentiality agreement. An entire day wasted discussing what, if anything, the two parties could discuss.

The contrast in the two men’s personalities came to a head in 1980 when IBM contacted them about the new secret project. Big Blue was the largest computer company in the world that time. It occupied a dominant position in the industry that even its seven main competitors were known collectively as the seven dwarfs.

By the late 1970s, IBM salespeople started seeing Apple II’s and other personal computers popping up in the offices of their big corporate customers. IBM Chairman Frank Carey, sensing a treat, decided if IBM didn’t move fast to produce a little machine of its own, personal computer business would soon get too big for even Big Blue to dominate it.

In early 1980, Carey signed off on a plan to rush an IBM PC to market by September 1981. The strategy was to cut out years of laborious development by using off-the-shelf hardware and by licensing existing software from other companies. Except for the logo glued to each unit, nothing about the new IBM PC would be unique to IBM.

An IBM engineer named Jack Sams was in charged with setting up licensing deals for the IBM PC’s software. Of all the personal computers in the market, Sams was not impressed with the Apple II, which is why the Microsoft called the Softguard caught his eye.

The one drawback to the Apple II was that its proprietary operating system prevented it from running popular CP/M-compatible software applications including Wordstar and and dBase. The Softcard was a little translator card, created by Paul Allen at Microsoft, that snapped into the back of the Apple II and turned it into a CP/M-compatible machine.

Gates and Kildall had a lot of common. Both hailed from the Seattle area. They had even bumped into each other at a Seattle computer center years when Kildall was still a graduate student at the University of Washington and Gates was a high school hacker sneaking some computer time.

Both loved talking about software code as much as they enjoyed writing it. They also shared a passion for driving dangerously fast. When they weren’t talking software, they swapped stories about speed traps, comparing the size of their most recent speeding tickets.

While they have similarities, they have more differences as well. Kildall was older, a family man, and much more accomplished programmer. At heart he was academic, a computer scientist with a Ph.D. Though he was nominally the head of Digital Research, he disdained making business decisions and preferred spending his time on complicated programming tasks that most CEOs would leave to their employees.

Gates was the exact opposite. He was a businessman first and a programmer second. He started Microsoft while still being a student at Harvard, and then he dropped out before finishing because his interest is getting his business going.

At the age of 25, he was still living like a college student in a messy one-bedroom apartment.

Gates and Kildall shared a capacity for getting lost in the days-long bonus of obsessive programming, their motivations were completely different. Gates would never have spent a year building a microcomputer from scratch as Kildall did, merely out of intellectual curiosity.

Gates’ all-nighters were always driven by practical business objectives and deadlines, while Kildall had more of an artistic temperament. Some said that Kildall designed computer code the way Mozart composed symphonies.

With virtually no competition, CP/M earned Digital Research $85cents of profit on every dollar of revenue that came in. Officials at Digital Research’s bank once called to double-check some figures because they didn’t think it was possible for every company to have such high profit margins.

By mid-1980s, Kildall and Digital Research were both on the road to oblivion and today Kildall ranks as a mere footnote in computer history. The reason lies with a few crucial miscalculations he made in 1980, part of a cautionary tale about how imitation often trumps innovation.

One of the first computer entrepreneurs to hitch his wagon to CP/M’s rising start in the late 1970’s was a precocious young programmer named Bill Gates.

In 1979, when Gates was just 24y/o, he was running a software company called Micro-Soft. The company had secured an early, profitable niche in the personal computer industry by creating popular versions of BASIC and other programming languages that communicate between a computer’s hardware and its operating system software.

Gates and his partner, a high school friend named Paul Allen, didn’t stumble into the software industry the way Kildall had with Digital Research. Since their teenage years, Gates and Allen had been looking for ways to turn their passion for code-writing into cash. They originally wrote the Microsoft version of BASIC in 1976 because they saw a chance to get into the ground floor with one of the earliest makers of homebuilt personal computer kits.

After that, Gates often sought licensing deals that would pair Microsoft’s BASIC with Kildall’s CP/M, to the hope that Microsoft BASIC could ride CP/M’s coattails and become an industry standard of its own.